Reinstating former boss Myron Ullman suggests a desire to bring back some of the old ways, but reversing the core idea of Mr. Johnson’s turnaround plan — refitting the department stores to become collections of mini-stores showcasing individual brands — would be expensive and tricky, an exercise in squeezing toothpaste back into the tube.

That also seems to be the view of Mr Ullman, who in an interview yesterday with the WSJ:

“said he has yet to make any decisions about what to keep and what to replace from Mr. Johnson’s strategy, including the former CEO’s management team.

“I wouldn’t recommend that we go back to the way J.C. Penney was when I left. Things change,” he said. But, he added, “There’s no reason to try and alienate customers who want to try and shop at J.C. Penney.”

Reversing Mr. Johnson’s decision to abandon the sales and discount vouchers that historically drove customers to the stores seems more likely, particularly given Johnson himself had already stepped back from his total aversion to sales.

Analysts at S&P Capital IQ wrote that they expect promotions to make a comeback, but the store-within-store concept to remain:

We expect the company to maintain investment in new brand shop-in-shops already scheduled to open over the near term, including nearly 20 new home-related shops in 505 stores this May. We also see potential for JCP to improve customer service by increasing store staffing and to drive more traffic by marketing its weekly promotions more aggressively (while limiting discounts).

At this time, Ullman appears committed to the shop strategy. In fact, he launched JCP’s first shop-in-shops: Sephora in 2006 and MNG by Mango in 2010. May’s home launch rollout plans remain in place but 2H plans are being examined. Moreover, we think driving sales and margins will necessitate significant maintenance CapEx, eCommerce investment = ramp up and possibly store closures – all incremental cash uses.

“Instead management cites that they are simply looking for better execution and financial stability. In our view, attaining an external candidate would have required more time for them to conduct due diligence and the familiarity of Mike Ullman was likely needed to calm the fears in the vendor community. With no employment agreement, we believe Ullman will look to quickly assess what is salvageable over the next 6-12 months and make a recommendation to the Board on the next CEO or for an alternative strategic option (via real estate or outright sale).”

The real estate option could be tempting if Mr. Ullman determines the store-within-store concept is a dead end. Last month, ISI released a note estimating that if JCP spun off its 300 best-located stores into a new real estate company that leased them to commercial tenants, the new business could be worth a conservative $10.8 billion alone.

By itself, that is more than three times what the market is valuing all of JCP at today — and even after the spin-off, the company would still have 800 of its own stores left to run however it pleases.